uftaa congress kuala lumpur friday · uftaa congress kuala lumpur 19 april 2013 friday. session 4...

UFTAA CONGRESS KUALA LUMPUR

19 APRIL 2013

FRIDAY

SESSION 4SUSTAINING THE TRAVEL INDUSTRY AND THE

ENVIRONMENT

A look at how Travel Agents can contribute back tothe environment as well as the society whilemaintaining a profitable business. The 2002 CapeTown Declaration on Responsible Tourism inDestinations stated that responsible tourism isabout “making better places for people to live inand better places for people to visit” ResponsibleTourism is protecting the ecological & social aspectsof a particular locale, at same time creatingsustainable tourism, providing economical benefitsto all parties involved.

SESSION 4MODERATOR

MR PHUA TAI NENGChief Executive Officer, MATTA

Mr Phua Tai Neng is currently the ChiefExecutive Officer (CEO) of MATTA. Mr Phua aswith the Government for 15 years and afterleaving the Government, he was managing theaffairs of a high profile sports association in thecountry.

SESSION 4

PANELIST

RESPONSIBLE TOURISM – FOR THE FUTURE

Y.BHG DATO’ DR. HJ AZIZAN NOORDIN

Deputy Director General,

Tourism Malaysia

Dato’ Dr Haji Azizan Noordin began hiscareer in the tourism and hospitality industry,Tourist Development Corporation Malaysia nowknown as Malaysia Tourism Promotion Board asearly as 1978 as a Tourist Officer.

Today, after 34 years in the civil service,Dato’ Azizan is still serving but more experienced.His advancement from rank and file for the past 34years had amassed a wealth of experience andknowledge that is indeed beneficial to the tourismindustry as well as the rakyat at large. He is nowthe Deputy Director General (Planning).

RESPONSIBLE TOURISM FOR THE FUTURE - THE MALAYSIA EXPERIENCE

by:

DATO’ HAJI AZIZAN NOORDINDeputy Director General (Planning)

Tourism Malaysia

RESPONSIBLE TOURISM FOR THE FUTURE 8

OBJECTIVE

9

11

2012 MALAYSIA TOURISM INDUSTRY ACHIVEMENTS

12

Achievement Total Achievement

20122020 Target

Foreign Tourist Revenue (RM billion) 60.6 168

# Arrival (mil) 25 36

Global Tourist Arrival # 9 Top 10

Global Tourist Revenue # 14 Top 10

Foreign Revenue (2011) 3rd (after manufacturing & palm oil)

Total Tourism Workforce (2011) 2.0 million

LEISUREPrimary and Secondary Market

EXPATRIATE MARKETSingapore, Thailand, Hong Kong, Vietnam,

UAE

ECO TOURISM UK, US, Germany, Scandinavia, Japan,

Australia, Korea and Hong Kong

WELLNESS TOURISMASEAN, Japan, Korea, Taiwan, Hong Kong,

West Asia, Australia, United Kingdom, Russia

EDUCATION TOURISMWest Asia, Indonesia, China, Korea , South

Africa

INCENTIVE TRAVELChina, Taiwan, Japan, Indonesia, India,

Australia, Korea

HOMESTAYJapan, Korea, Singapore, Netherlands, Australia

MM2HJapan ,Korea, India, Taiwan, West Asia, Bangladesh, Australia, UK, Indonesia

SPORTS ASEAN, Australia, New Zealand, Japan, Korea, Germany, UK. Scandinavia, Mauritius,

LUXURY/HIGH END TRAVELFrance, UK, Scandinavia, Russia, US, India, Hong Kong, West Asia

SHOPPINGASEAN, China, Hong Kong, India, Bangladesh, West Asia, Australia, New Zealand, ASEAN

HONEYMOONERSWest Asia, Italy, UK, US, China, Taiwan, India, Korea

TARGET MARKET

14

ECO-TOURISM

• It merely signifies running an industry which has a low impact on the local natural environment while reaping its economic benefits.

• It is about making “better places for people to live, and better places for people to visit” – the order of these two aspirations is critical. The characteristics of RT as defined in the Cape Town Declaration on Responsible Tourism (2002) are very generic;

RESPONSIBLE TOURISM FOR THE FUTURE

BEST PRACTISE IN MALAYSIA : HOMESTAY PROGRAM

Officially a tourism product in 1995, but recognized as a potential product for international product with the launch of the rural tourism master plan 2001

RESPONSIBLE TOURISM FOR THE FUTURE 16

Minimise Negative Economic, Environmental, And Social

Impacts

RESPONSIBLE TOURISM FOR THE FUTURE 17

• Offer visitors with the traditional lifestyle of the locals

• 159 villages in Malaysia with 3,424 houses (4,717 rooms)

• Total Homestay Tourist 2012 ~ 325,258(Domestic– 259,423 ; International – 65,835 or 23.3%)

• Average Rate – USD 40 including 3 meals daily, accommodation & cultural activities

• Rail Tourism & Agro Tourism

• Plant A Tree – 14,023 trees have been planted so far

Generates Greater Economic Benefits For Local People And Enhances The Well-being Of Host Communities, Improves

Working Conditions And Access To The Industry

RESPONSIBLE TOURISM FOR THE FUTURE 18

(Total Receipt)

Involves Local People In Decisions That Affect Their Lives And Life

Chances

RESPONSIBLE TOURISM FOR THE FUTURE 19

RESPONSIBLE TOURISM FOR THE FUTURE 20

TOP 10 VISITORS TO HOMESTAY

(Country) (Visitors) (Percentage)

Makes Positive Contributions To The Conservation Of Natural And Cultural Heritage, To The Maintenance Of The

World’s Diversity

RESPONSIBLE TOURISM FOR THE FUTURE 21

Provides More Enjoyable Experiences For Tourists Through More Meaningful Connections With Local People, And A

Greater Understanding Of Local Cultural, Social And Environmental

Issues

RESPONSIBLE TOURISM FOR THE FUTURE 22

PAT (Plant A Tree) PROGRAM

Plan A Tree project at homestays registeredwith the Ministry of Tourism Malaysia toencourage foreign tourists to plant a tree at thehomestay before leaving for their country.

Encourage repeat visits among tourists to comeback & witness the development of the treethat they had planted.

Culturally Sensitive, Forster Respect Between Tourists And Hosts, And

Builds Local Pride And Confidence.

RESPONSIBLE TOURISM FOR THE FUTURE 23

• 2008 - ASIAN MARKETING EFFECTIVENESS AWARDS

Gold Award - Best Long Term Marketing and Branding Campaign

Awards for the Malaysia Truly Asia Campaign

PATA GOLD AWARD

Marketing Media Awards - Travel Advertisement Broadcast Media

- "Visit Malaysia Year 2007" - Tourism Malaysia

- Marketing Media Awards - CD-ROM

- Travel Manual Interactive CD - Tourism Malaysia

TRAVELWEEKLY (ASIA) INDUSTRY AWARDS 2008

Best Ecotourism Destination

Best Brand Campaign for Tourism Malaysia's Visit Malaysia Year

2007 campaign

2009 - GUINNESS WORLD RECORDS

Mount Kinabalu's - World's Highest Via Ferrata

PATA GOLD AWARDS

Gold Award in the Marketing Media - Travel Advertisement Print

Media Category

-‘Malaysia : Truly Asia, Truly More With Every Visit. It Must Be

Malaysia.'

ASIAN MARKETING EFFECTIVENESS (AME) AWARDS, HONG KONG

Gold Award - Best Sustained Success (Malaysia Truly Asia)

DAS GOLDENE STADTTOR (THE GOLDEN CITY GATE)

INTERNATIONAL TOURISME BORSE (ITB), BERLIN

Gold Award - Malaysia : Truly Asia ‘Truly More' Print Campaign

Adrian Advertising Awards

to date: 4 Gold, 1 Silver &

5 Bronze

Accolades

RESPONSIBLE TOURISM FOR THE FUTURE 24

RESPONSIBLE TOURISM FOR THE FUTURE 25

ACHIEVEMENTSMalaysia has won threePATA Gold Awards 2012,Tourism Malaysia wonthe coveted PATA GoldAwards 2012 in thecategories of Marketing– Primary GovernmentDestination for its ‘AMillion Experiences toShare’ campaign andMarketing Media –Travel Poster for itsposters depicting theOrang Utan, Diving,Mount Kinabalu,Homestay and SitiKhadijah Market.

Thank You

RESPONSIBLE TOURISM FOR THE FUTURE 26

SESSION 4

PANELIST

RESPONSIBLE & SUSTAINABLE TOURISM – HOW IS IT REMODELLING THE INDUSTRY?

MR. STEVE NOAKES

Board of Director, Global Sustainable Tourism Council (GSTC), Australia

Steve Noakes has been involved in the AsiaPacific tourism industry for some 35 years. He is aleading regional advocate for mainstreamingsustainability into the tourism sector and hasworked as a senior consultant/advisor to theUNWTO, United Nations Environment Program,International Labour Organisation, AsianDevelopment Bank, World Bank, bilateral donoragencies and a number of national governmentsacross the region.

He has served on the Boards of NGOs such asthe Pacific Asia Travel Association, GlobalSustainable Tourism Council and Sustainable TravelInternational.

Responsible & Sustainable Tourism –

How is it remodelling the industry?

Steve Noakes

Topics:

Planet &people

Sustainability Demand GSTC Travel agency

groups

Thanks for the photo

Photograph by Kris LeBoutillier

Less is more at Castaway Resort on Koh Lipe island, ThailandGuests dine on fresh local fare while cozily

seated on breeze-fanned platforms.

http://travel.nationalgeographic.com/travel/countries/southeast-asian-beaches-photos-traveler/#/outdoor-dining-castaway-resort_21944_600x450.jpg

Nice planet.Good place for travel.

Asia & the Pacific

Image from Voyager 1 (1977)

Beyond our moon –7.25 million miles from Earth

Thanks NASA for the photo.

Humans on spaceship earth. Impacts & resource use

“Earth provides

enough to satisfy every man's needs, but not every man's greed.”

Mahatma Gandhi

http://gandhifoundation.org/

SUSTAINABILITYGanges River Festival

Photograph by David Lazar

Hindu pilgrims bathe in the Ganges hoping to wash away their sins.

http://travel.nationalgeographic.com/travel/countries/india-photos/#/shower-festival-ganges_6744_600x450.jpg

SUSTAINABLE TOURISM

CHAPTER 1

EMERGENCE OF SUSTAINABLE TOURISM

34

Tourism demand - continuous growth in post WW2 period.Expansion of Asia Pacific.

Green demand -Who wants responsible approaches to tourism?

Trip Advisor (2012) : 700+ US travellers surveyed

71%: will would make environmentally friendly choices this year

57% : “often” make eco-friendly travel decisions, such as their choice of hotel, transportation, or food source

41% “mostly” believe hotel claims to be eco-friendly, 32 % “rarely” do and 20 % “don’t know”.

21% would be “green believers” if they were able to see a hotel’s environmentally-friendly certification

61% rarely feel informed about whether hotels are truly eco-friendly – and 13% say they never do.

“Green initiatives are an increasing priority for hospitality businesses that are trying to reduce their environmental footprint”

Jenny Rushmore, Director of Responsible Travel TripAdvisor.

http://www.multivu.com/mnr/49260-tripadvisor-eco-friendly-travel-survey-voluntourism-go-green

Neilson (2012): 2012 Global Corporate Citizenship Survey28,000 consumers in 56 countries

Almost half of global consumers are willing to pay more for products from companies that show a commitment to social responsibility.

62% prefer to work for these companies

59% prefer to invest in these companies

http://www.brandchannel.com/home/post/Nielsen-Report-Corporate-Citizenship-040312.aspx

Consumers in Asia Pacific (55%) rate higher than any other region in willingness to pay extra for products & services from socially-responsible companies

Industry responding: TUI sustainability goals

Marketplace confusion on terms & ecoloabels

GSTC: The international body for :

1. fostering increased knowledge &understanding of sustainable tourism practices

2. promoting the adoption of universal sustainable tourism principles

3. building demand for sustainable travel

www.gstcouncil.org

GSTC programs:

International standardsettingDestinations

Education & trainingMarket accessAccreditation

Global sustainable tourism CRITERIA

• Sustainable management• Socioeconomic impacts• Cultural impacts• Environmental impacts (including consumption of resources, reducing pollution & conserving biodiversity and landscapes)

Hotels & Tour Operators criteria + Destinations criteria

So far, 15 standards have achieved GSTC recognised status

1. Travelife for Hotels and Accommodations

2. Austrian Ecolabel for Tourism (Österreichisches Umweltzeichen)

3. Biosphere Responsible Tourism

4. Certification for Sustainable Tourism (CST) for hotels

5. EarthCheck Company Standard

6. Eco-Certification Malta

7. Ecotourism Australia's ecotourism standard

8. Ecotourism Australia's advanced ecotourism standard

9. Ecotourism Ireland Certification Programme

10. European Ecotourism Labeling Standard (EETLS)

11. Fair Trade in Tourism South Africa (FTTSA)

12. Japan Environmentally Sustainable Accommodations International Standard (ESAIS)

13. Rainforest Alliance standard for tourism operations

14. SustainaProgram (STEP)

15. Travelife Sustainability System for Hotels and Accommodationshttp://www.gstcouncil.org/about/news-a-announcements/713-travelife-achieves-recoble Tourism Eco-Certification gnized-global-sustainable-tourism-council-status-for-its-tour-operator-and-travel-agents-standard.html

Examples of national travel agency organisations engaging with GSTC

http://www.asta.org/BusinessServices/content.cfm?ItemNumber=3652&navItemNumber=3732

October 5, 2010: ASTA Joins Global Sustainable Tourism Council.

Feb 4, 2013: Travelife Standard for Tour Operators and Travel Agents has achieved ‘recognized’ GSTC certification status.

UFTAA’s Mission Statement – an organisation that …

‘… enhances the world travel and tourism industry and a sustainable tourism.’

How can UFTAA continuously improve its leadership for:(i) sustainable business approaches by its members?(ii) catering to the growing global market for sustainable

tourism products?

Thank you

http://travel.nationalgeographic.com/travel/countries/india-photos/#/varanasi-train-station_6745_600x450.jpg

Varanasi Train StationPhotograph by Thomas Holton/Getty Images

Q & A

Session

NETWORKING BREAK

10.30 – 11.00 am

SESSION 5

AIR FORUM

The IATA Agency Program – “ Somethingold and new. This session will seek to inform onnew developments in IATA’s Agency Program(Resolution 800f – Agent Financial Standards)and something old (Resolution 850p – FinancialSecurity alternatives). What Travel Agents (andairlines) should know about the new criteriaand their ability to address IATA guaranteerequirements should the need arise”

SESSION 5PANELIST

AIR FORUM

MR. RAY HARTWEGDefault Insurance Program (DIP)

Ray has worked extensively on developing automation anddistribution systems for clients in Asia since 1988. He was formany years the Vice President of marketing for Aerotel – Air NewZealand’s GSA in The Philippines

As regional Director, Agency Accreditation Services forIATA for seven years, Ray was intimately involved in thedevelopment and implementation of IATA’s new Agency Programproducts in 40 Asia-Pacific countries. As supervisor of IATA’sAgency activities in Asia and the Pacific, Ray was uniquelysituated to develop an expertise in distribution unavailableelsewhere.

Ray held a variety of positions with Flying Tiger Line, at thetime the world’s largest all-cargo airline. His last position asManager, Pacific Pricing & Industry Affairs gave Ray extensiveexperience in the Far East as well as industry related activities.Ray is an alumnus of the University of Connecticut and theFletcher School of Law and Diplomacy (Tufts University) withextensive cross cultural experience having lived in Europe, NorthAmerica and several Asian countries.

Session 5: Air Forum - DIP

Raymond A. Hartweg

Director,

Travel & Aviation Risk Solutions Ltd. (TARS)

1997-2010 - USD17M (238)

What is a DIP? From Resolution 850p –Financial Securities

hartwegr@tars.aero 52

Objective

For Airlines -

To provide a familiar cover of up to 100% of airlines’ risk from the default of an IATA agent (bank guarantee equivalent);

For Travel and Cargo Agents -

To offer a cost effective alternative to expensive financial guarantees

hartwegr@tars.aero 53

Benefits for BSP AirlinesCoverage

Approx YY (9/16/35/45) days of losses for passenger

Approx XX (45) days of losses for cargo

Covers Agent’s current level of financial guarantee

(tailored to current practice)

Guaranteed timely payment (14-30)

Peace of mind and

Improvement in agent-airline relationship

hartwegr@tars.aero 54

Benefits for BSP AgentsLow cost alternative to meet IATA’s financial

requirements - reduces costs

Several Payment options, no mandated lump sum, improves cash flow (Q/SA/A)

Release of equity for business purposes - no deposit requirements nor liens on working capital - NO BANK GUARANTTEE

hartwegr@tars.aero 55

Tried & Tested Service - ThailandLaunched AUG 97Economic upheaval JUL 9798% of marketAll airlines participatedAgents – TMC + moreMarket share > 70%Claims ‘97-’02 – USD2.07M

(23)

hartwegr@tars.aero 56

Simplifying your Business

hartwegr@tars.aero 57

Current Approach Flawed & Failing

hartwegr@tars.aero 58

• BG & DIP fundamentally different instruments

• Too Complex

• Single market approach makes it less viable to insurers

• No spread

• Concentrated risk

• Limited volume

• Little or no growth

BG DIP

Bank Guarantee safer than insurance?•Bank Failures in USA – 2008-2012 (FDIC & Weiss Rating)

•301 with over USD1B in assets!

•USD677B in assets!

•Banks – low reserves ; Ins- 115%+

Two Telling Quotes:

•“Most insurance companies are smaller, sounder and safer than most banks…” – and

•“Unlike banks, they also tend to become more financially stable the bigger they get since the risks run by individual policyholders are not correlated.”

Source: FT – J. Gapper - 12Dec12

Banks exempt from review – insurer’s not – R850p

0

50

100

150

200

250

300

350

400

450

500

2008 2009 2010 2011 2012 Total

Banks

Insurers

hartwegr@tars.aero 59

A-rating requirement

hartwegr@tars.aero 60

• Limited supply (in any year less than 40 w/w

• Nearly all off-shore (MY exception)

• Being Rated -overrated (AIG 2008) – 85B+

• Ignores – good firms & local RE content

Cut Through Agreement

hartwegr@tars.aero 61

•No local responsibility (no retention)

•Ultimate Guarantor no relationship with

IATA – approval process local.

•Collect claim where?

•What procedures apply?

•Who makes this call?

Retention

•Insurance Regulations

•Local commitment

•Logical to vet locally vs. ultimate guarantor being off-shore?

•Negotiate with ??

hartwegr@tars.aero 62

A Way Forward•Consult – prior to taking action

•Risk Assessment & Management – What is assessment process? Avoid BIGGER is better mind-set

•Think beyond borders

•Transparent & Partnership role

•Keep it Simple – new P&S?

•3.5 to 9 pages

•15 vs 3 definitions! (2 contrary to R866)

•One-size-does-not-fit-all

•Timeliness (5 days)

•“Additional financial loss” – a deal breaker for insurers;

•If DIP in place of BG & covers same risk –why try to improve on terms?

Breaking Clouds ?

hartwegr@tars.aero 63

Risk Assessment & Cover

Cover Profile 2002 -11

Per Agent – Cap #1

MYR 1.89M – Ave Annual Default

MYR9.2M – Per Agent Cover

Per Annum – Cap #2

MYR7.4M – 2011

MYR30M – Annual Cover

Ave. Agent Default Size

USD42,571

44 Agent defaults/Year

0

5

10

15

20

25

30

35

Agent Annual

Cap #1

Cap #2

hartwegr@tars.aero 14

Five Questions To Consider

1. If your financial review is satisfactory – why do you still need to provide a financial guarantee?

2. Why are you not in a DIP? Why is there no DIP in my country?

3. Do I know the PSAA, my rights and my country’s financial criteria (hint in your Travel Agent Handbook)?

4. Do you know how to contact your TAC?

5. Is it time for an UFTAA-wide DIP?

hartwegr@tars.aero 65

JOIN THE BSP-MALAYSIA DIP NOW!

WHY JOIN RHB INSURANCE‘S

DEFAULT INSURANCE PROGRAM (DIP)?

LOWER COSTS SAVES YOU MONEY

NO COLLATERAL

FREES YOUR COMPANY ASSETS, IMPROVES YOUR BALANCE SHEET.

KNOWN FIXED COST

FITS INBUDGET PLANNING

PROTECT YOUR PRIVATE ASSETS

NO PERSONAL INDEMNITY OR DIRECTORS’ GUARANTEE REQUIRED.

PAYMENT FLEXIBILITY

THREE PAYMENT OPTIONS PROVIDE FLEXIBILITY AND MORE POTENTIAL SAVINGS

EASY ADMIN ONE-PAGE REGISTRATION, SINGLE INVOICE, MATCHING RECEIPTS

INSURANCE KNOW YOUR COSTS IN ADVANCE

ANY BSP-DIP AGENT CAN JOIN THE DIP!

THE DIP IS: IATA APPROVED Agent Association SUPPORTED BOTTOM LINE - SAVINGS

CONTACT RHBI NOW!oGET “NO-OBLIGATION” QUOTES!oASK A FELLOW AGENT ABOUT

RHBI TODAY!

EMAIL ALL INQUIRIES TO:dip@rhbinsurance.com.my

hartwegr@tars.aero 66

Q & A

Session

NETWORKING LUNCH

12.30 – 2.00 pm

EXTRAORDINARY GENERAL ASSEMBLY

UFTAA GENERAL ASSEMBLY

• Approval of minutes of

General Assembly 2011

EXTRAORDINARY GENERAL ASSEMBLY

UFTAA GENERAL ASSEMBLY

• Finance Report

EXTRAORDINARY GENERAL ASSEMBLY

UFTAA GENERAL ASSEMBLY

• Discharge of Mandate

EXTRAORDINARY GENERAL ASSEMBLY

UFTAA GENERAL ASSEMBLY

• Reports

EXTRAORDINARY GENERAL ASSEMBLY

UFTAA GENERAL ASSEMBLY

• Elections

EXTRAORDINARY GENERAL ASSEMBLY

UFTAA GENERAL ASSEMBLY

• Deadline for recommendation

& resolutions

NETWORKING BREAK

4.00 – 4. 30 pm

EXTRAORDINARY GENERAL ASSEMBLY

UFTAA GENERAL ASSEMBLY

Resolutions &

Recommendations

CLOSING REMARKS BY

PRESIDENT OF UFTAA

MR. MARIO BEVACQUA

CLOSING COCKTAIL

7.00 pm

20 APRIL 2013, SATURDAY

POST CONGRESS EXCURSION TOUR TO THE STATE OF SELANGOR

8.00 am – Gather at the Lobby!

THANK YOU